UK Government Defends News Corp Ties as Scandal Spirals

LONDON – "We are sorry" the full-page ad began Saturday, as Rupert Murdoch tried to halt a phone-hacking scandal that has claimed two of his top executives with a gesture of atonement and promises to right the wrongs committed by his now-shuttered tabloid, News of the World.

Prime Minister David Cameron's Conservative-led government and the London police, meanwhile, faced increasing questions over their close relationship with Murdoch's media empire.

Cameron was feeling the heat Saturday after government records showed that Murdoch executives held 26 meetings with him in since he was elected in May 2010 and were invited to his country retreat. Senior police officers also had close ties to Murdoch executives, even hiring one as a consultant who has since been arrested in the phone hacking and police bribery scandal rocking Murdoch's News Corp.

Murdoch is struggling to contain the crisis, which has already forced him to shut down the 168-year-old News of the World, scuttled his bid for lucrative TV broadcaster BSkyB, knocked billions off the value of News Corp. and claimed the jobs of two key aides: Rebekah Brooks, CEO of his British unit News International, and Wall Street Journal publisher Les Hinton.

On Saturday, News Corp. ran an ad in seven British national newspapers with the headline "We are sorry." Signed by Murdoch, it apologized "for the serious wrongdoing that occurred."

"We are deeply sorry for the hurt suffered by the individuals affected. We regret not acting faster to sort things out," it said.

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A front-page headline in another Murdoch paper, The Times, called it a "Day of atonement."

The company plans to take out more ads in the coming days outlining its next steps -- part of a brand new strategy by the once all-powerful mogul.

The public displays of contrition came after News Corp. last week hired PR firm Edelman Communications, whose clients include Starbucks and Burger King, to help with public relations and lobbying. The hiring coincided with an abrupt change in tone -- as recently as Thursday Murdoch was quoted by the Wall Street Journal as saying the company had handled the crisis "extremely well in every way possible" and complaining he was "getting annoyed" at all the negative headlines.

Cameron has appointed a judge to conduct a sweeping inquiry into criminal activity at the News of the World and in the British media as he tries to distance the government from the scandal.

But Rupert Murdoch's son James, Brooks and ex-News of the World editor Andy Coulson were all guests at the prime minister's country house, Chequers.

Coulson's stay in March came only two months after he resigned as Cameron's communications chief amid the spiraling scandal -- an invitation that critics said showed poor judgment on Cameron's part and revealed the cozy relationship between political leaders and Murdoch's powerful media empire.

Coulson is one of nine people arrested and questioned by police over what they knew about phone hacking at the News of the World. No one has yet been charged.

Foreign Secretary William Hague defended the government Saturday, saying "it's not surprising that in a democratic country there is some contact between leaders" and media chiefs.

"I'm not embarrassed by it in any way, but there is something wrong here in this country and it must be put right," Hague told the BBC. "It's been acknowledged by the prime minister and I think that's the right attitude to take."

Hague said Cameron had invited Coulson to Chequers "to thank him for his work, he's worked for him for several years, that is a normal, human thing to do."

Cameron said last week that the relationship between politicians, the media and the police in Britain had grown too close and must be changed.

Murdoch began his apologies Friday as he met with the family of murdered schoolgirl Milly Dowler, whose phone was hacked by the News of the World in 2002. The revelation that journalists had accessed her phone in search of scoops while police were looking for the missing 13-year-old fueled an explosion of interest in the long-simmering scandal.

The 80-year-old mogul said "as founder of the company I was appalled to find out what had happened and I apologized."

The phones of celebrities, royal aides, politicians and top athletes are also alleged to have been hacked, and police are investigating whether victims of London's 2005 terrorist bombings and the families of dead British soldiers were among the tabloid's targets.

The scandal claimed its first casualty among Murdoch's U.S. executives Friday when Hinton announced he was stepping down immediately as publisher of the Wall Street Journal and chief executive of Dow Jones & Co.

A staunch ally who has worked for Murdoch for more than half a century, 67-year-old Hinton was chairman of Murdoch's British newspaper arm during some of the years its staffers are alleged to have hacked into cell phones. Still, he had testified to a parliamentary committee in 2007 and 2009 that he had seen no evidence that abuses had spread beyond a single jailed reporter, Clive Goodman.

Hinton said Friday that "the pain caused to innocent people is unimaginable."

"That I was ignorant of what apparently happened is irrelevant," he said.

Murdoch's British lieutenant, Brooks, also stepped down Friday, saying her status as "a focal point of the debate" was interfering with "our honest endeavors to fix the problems of the past." Tom Mockridge, the head of Sky Italia, was installed to replace Brooks.

The departure of Brooks and Hinton also increases pressure on 38-year-old James Murdoch, chairman of BSkyB and chief executive of News Corp.'s European and Asian operations. James Murdoch, his father Rupert and Brooks all face questioning Tuesday by a U.K. parliamentary committee investigating phone hacking and police bribery.

Lawmakers want to quiz James Murdoch about what he knew when he approved the News of The World's 2008 payment of $1.1 million to halt legal action by one hacking victim, Professional Footballers' Association chief Gordon Taylor. Several other hacking targets, including actress Sienna Miller, also received payments from the tabloid.

James Murdoch said last week that he "did not have a complete picture" when he approved the payouts.

British police are also under pressure to explain why their original hacking investigation failed to find enough evidence to prosecute anyone other than Goodman and private investigator Glenn Mulcaire. Detectives reopened the investigation earlier this year and now say they have the names of 3,700 potential victims.

Records show that senior officers -- including Paul Stephenson, the current chief of London's Metropolitan Police -- have had numerous meals and meetings with News International executives in the past few years.

The Guardian newspaper, which broke news of the Dowler hacking, said Saturday that senior police officers including Stephenson tried to persuade its editors in 2009 and 2010 to tone down the paper's coverage of the scandal, saying their stories were inaccurate and exaggerated the scale of the wrongdoing.

Neil Wallis, a former News of the World executive editor arrested and questioned this week about phone hacking, was employed as a part-time PR consultant by the London police force at the time.

The government says the judge-led inquiry will look into the police decision to hire Wallis, which occurred on Stephenson's watch.

Former Deputy Prime Minister John Prescott, who claims his own phone was hacked, said hiring Wallis showed bad judgment and urged Stephenson to resign.

"You're answerable for your actions and if he's the commissioner of the Met Police under attack at the time for its inadequacies, of course he should go," Prescott told Channel 4 News on Saturday.

Murdoch is eager to stop the crisis from further spreading to the United States, where the FBI has opened an inquiry into whether 9/11 victims or their families were also hacking targets of News Corp. journalists.

Newspaper analyst Ken Doctor said the departures of Brooks and Hinton show Murdoch is "trying to build a firewall between the past and the future of News Corp."

Now that News of the World has been shut down, Murdoch's global media empire includes Fox News, the 20th Century Fox movie studio, the Wall Street Journal, the New York Post and three British newspapers -- The Sun, The Times and The Sunday Times.